Energy Keystone XL Pipeline:
Facts Undermining U.S. Energy Security
and Sending Tar Sands Overseas
GRAPH 3
Gulf of M
GRAPH 1: Projecting Canadian crude production
6
Keystone XL Will Not Increase
America’s Oil Supply
2.5
DEVELOPMENT
Million Barrels Per Day
Canada isn’t even producing enough oil to fill its existing
pipelines, which are running half-empty. So why is Keystone
XL such a priority for the oil industry? Because Keystone
XL is actually a pipeline that bypasses America in order to
maximize Big Oil’s profits.
By skipping over refineries and U.S. consumers in the
Midwest, tar sands producers will be able to send Canadian
crude to the Gulf Coast refineries in tax-free Foreign Trade
Zones, where it can be refined and then sold to international
buyers—at a higher profit to Big Oil.
There are clear alternatives to allowing the United States to
be an oil conduit for tar sands merely to accommodate evergrowing profits for big oil companies. As American gasoline
consumption continues to shrink, the United States can
continue its current trajectory to reduce its oil dependency by
improving fuel efficiency and clean energy investments. These
investments will create tens of thousands more jobs than
Keystone XL ever would—and without risking a major oil spill.
Taking concrete steps to reduce the country’s oil dependence
is the only way to increase U.S. energy security.
5
3.0
4
KEYSTONE XL
PIPELINE
1.5
3
1.0
EXPORTS:
EUROPE
2
2005
2010
2015
Year
2020
0.5
2025
20
Ja
C
an
EXPORTS:
Comparing annual forecasts of western Canadian
crude production by the Canadian
Association of Petroleum Producers (CAPP) LATIN
AMERICA
Graph
2. Pipeline
takingoil
Canadian
oil to the United
far exceeds
Figure
1: capacity
Canadian
production
will States
not exceed
current and future production
Graph 4:
pipeline capacity until 2025
5
— Canadian export pipeline capacity w/o new pipelines
— Projected Western Canadian crude available for export
Million Barrels Per Day
Existing Canadian export pipeline capacity
Canada does not produce enough tar sands oil to fill existing
pipelines. There are still more than 2 million barrels per day
of empty space on existing pipelines going from Canada to
the United States without Keystone XL. Canada’s current
oil production, including both conventional crude and tar
sands, uses less than half of its export pipeline capacity.
Canada’s current glut of export pipelines to the United States
is expected to persist for more than a decade. According to a
2011 forecast of future production by Canadian Association
of Petroleum Producers (CAPP), Keystone XL would not be
needed until sometime after 2025.
2.0
25
4
Million Barrels Per Day Oil Equivalent
Million Barrels Per Day
The national debate surrounding the Keystone XL tar
sands pipeline has obscured the fact a key purpose of
the pipeline is to send Canadian oil through America’s
heartlands to the Gulf Coast for export.
3.5
— Actual Production
— 2006 Forecast
— 2008 Forecast
— 2009 Forecast
— 2010 Forecast
— 2011 Forecast
TAR SANDS
20
15
3
10
2
2011
2015
Year
2020
2025
Projected Western Canadian crude calculated by subtracting western Canada’s local
refining capacity from western Canada’s crude production as forecasted by the Canadian
Association of Petroleum Producers in 2011.
Projected Western Canadian crude calculated by subtracting western Canada’s local refining
capacity from
western
Canada’s crude production
forecasted
theto:
Canadian Association
For theasfull
reportbygo
For more information,
please
contact:
Petroleum Producers in 2011.
www.nrdc.org/energy/kxlsecurity.asp
Anthony Swiftof at
[email protected] or
and www.priceofoil.org/kxl-underminingLorne Stockman at [email protected].
energy-security.
5
0
20
P
2
Keystone XL backers are simply using the pipeline as part of
a larger
strategy
to re-direct oil from the American Midwest
— Actual
Production
to —
international
2006 Forecastbuyers who are willing to pay a higher price
for—it.2008
TheForecast
Keystone XL pipeline thus would add billions of
—
2009
dollars toForecast
the annual cost of oil for million of U.S. consumers
— 2010 Forecast
the Midwest. To sweeten the deal, many of the refineries on
5 in —
2011 Forecast
the Gulf Coast happen to be located in Foreign Trade Zones
where they can export refined products without paying U.S.
taxes. Keystone XL facilitates this export trade by providing a
source of heavy sour crude that is ideal for producing diesel,
4 which is in high demand on world markets.
Figure 2: The growing business of exporting
GRAPH
3: The growing
business of
exporting
products
from
petroleum
products
from
Gulfpetroleum
of Mexico
refineries
Gulf of Mexico refineries
3
3.5
— Total U.S. Petroleum Exports
— Exports from Gulf of Mexico Refineries
3.0
2
2005
2010
2015
Year
2.5
2020
2025
Comparing annual forecasts of western Canadian crude production by the Canadian
Association of Petroleum Producers (CAPP)
Million Barrels Per Day
2.0
Graph 2. Pipeline capacity taking Canadian oil to the United States far exceeds
current
1.5 and future production
In3.5
the event of a major global oil supply disruption Canadian
— Total
U.S. not
Petroleum
Exports
oil supply
would
be able
to ease the oil price spike that
—
Exports
from
Gulf
of
Mexico
Refineries
would result. Tar sands oil does not
enhance energy security
simply
because it comes from a friendly neighbor. Continued
3.0
reliance on oil empowers all countries that are major oil
exporters.
2.5
Oil Demand Reduction is the Best
Energy
Security Policy
2.0
The only way to reduce America’s vulnerability to rising
oil prices and volatile supply is by making investments to
1.5
reduce
U.S. oil dependence. If we do not make active choices
to secure a clean energy future today, in twenty years our
nation will remain where it is now—vulnerable to unstable
1.0
international
oil markets and forced to export its wealth
to meet its energy needs. Adopting a series of oil savings
policies would reduce U.S. oil consumption and imports by
5.70.5million barrels per day in twenty years. The United States
2002
2004
2006
2008
2010
2011
has already
taken a big step in the
right direction by adopting
Year
Jan
Oct
Comparison
crude oilefficient
and petroleum
products
exports
from
United States
new rules
forofmore
cars
and
light
trucks
that will
and the Gulf Coast (PADD III) from U.S. Energy Information Administration (U.S. EIA)
reduce U.S. oil consumption by 1.7 million barrels per day
by 2030. That’s twice what Keystone XL would carry at
maximum capacity.
Graph 4: Clean energy policies dramatically reduce U.S. dependence on oil imports
Figure 3: Clean energy policies dramatically
reduce U.S. dependence on oil imports
25
5
1.0 — Canadian export pipeline capacity w/o new pipelines
— Projected Western Canadian crude available for export
0.5
2002
Jan
Existing Canadian export pipeline capacity
2004
2006
Year
2008
2010
20
2011
Oct
Million Barrels Per Day
of oil
crude
and petroleum
products
exports
United
States
Comparison
of crude
andoilpetroleum
products
exports
fromfrom
United
States
4 Comparison
and the Gulf Coast (PADD III) from U.S. Energy Information Administration (U.S. EIA)
and the Gulf Coast (PADD III) from U.S. Energy Information Administration (U.S. EIA).
Keystone XL will increase U.S.
Midwestern Oil Prices
Graph 4: Clean energy policies dramatically reduce U.S. dependence on oil imports
Keystone
XL will lead to higher U.S. oil prices because it will
3
Million Barrels Per Day Oil Equivalent
divert oil that would have otherwise gone to the Midwest
and send it to the Gulf Coast. This reduces U.S. oil supply
25
■ Petroleum
Imports
and increases
prices.
TransCanada has acknowledged that
■ Petroleum
and
Biofuels the cost of Canadian crude
Keystone
XL would
increase
—
Demand
with
Clean
by more than $6 per barrelEnergy
in theMeasures
Midwest crude market.
TransCanada
estimated
that
these
higher prices would
20
2
increase
U.S. market paid for
2011 the price the 2015
2020Canadian crude
2025
Year
by between
$2
billion
and
$3.9
billion
a
year.
Projected Western Canadian crude calculated by subtracting western Canada’s local refining
capacity from western Canada’s crude production as forecasted by the Canadian Association
15of Petroleum Producers in 2011.
■ Petroleum Imports
■ Petroleum and Biofuels
— Demand with Clean Energy Measures
Million Barrels Per Day Oil Equivalent
Million Barrels Per Day
6
5
s
Canadian Oil: No Cure for Price Spikes,
Oil Shortages, or OPEC Power
GRAPH 3: The growing business of exporting petroleum products from
Gulf of Mexico refineries
Million Barrels Per Day
Keystone XL: An Export Pipeline with
Tax-Free Benefits for Oil Companies
GRAPH 1: Projecting Canadian crude production
15
10
5
0
2011
2015
2020
Year
2025
2030
Petroleum imports and domestic supply calculated using the U.S. EIA’s forecast in its
Petroleum
imports
domestic
calculated
EIA’s forecast
in its
2011
annual and
energy
outlook.supply
Petroleum
includesusing
crudethe
oil U.S.
and natural
gas liquids.
2011 annual energy outlook. Petroleum includes crude oil and natural gas liquids.
10
www.nrdc.org
www.nrdc.org/policy
5
www.priceofoil.org
www.dirtyenergymoney.com
© Natural Resources Defense Council and Oil Change International, January 2012
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